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My current game they lost a few sectors after only 10 hours and all the border sectors are contested and they loosing.
I have never seen this happen so quick and I've played 4.000+ hours.
On the other hand, considering already fixed bugs are returned in v7.5 I'm not surprised...
Years come, nothing changes...
Now they've buffed it to the point it's more durable and you don't have to be the sole saviour of the non-Terran universe, but it looks like the Xenon were probably always balanced against the original, totally dead economy.
After 7.1 the usual situation is that any xenon sectors that re not tharka get wiped out. Tharka remains strong, however.
I think Xenon could use more equipment tiers, could spawn ships with mods, and maybe could get more gates that would tie their sectors together.
I bet this is a fundamental issue with factions in general and not really a xenon problem. All factions have full knowledge of themselves, and are fairly blind to how they assign ships to tasks. This is usually fine, when a faction is all in one location. This is not fine, when a faction is scattered in a dozen different micro pockets across the galaxy.
Fixing the AI would probably be impossible. It's likely baked in too deep. What is easy, is creating a new micro faction. There are tons of micro factions in the galaxy, the antigone, scale pact, paranid has some, split has some, there are micro factions all over the place.
Just do the same thing with xenon, break them up into micro factions. Turn the southern sectors into xenon core #281, The northern sectors into xenon core #1A2D, and so on. Now they'll stop trying to send mining ships across 20 sectors of hostile space. Each faction has a limit on how much they want to build, and those limits might change due to major story events or player progress. It's not a difficult thing to get sorted on pen and paper at least, though it might take a lot of effort to code in game.
I'm leaning towards the thought that the issue lay under "usefulness" of a station criteria. Power plants usually produce lots more Energy Cells than Shipyard/Wharf needs, what means E.Cells often overstocked. Script finds that outcome and initiates station deconstruction because considers the station as needless (its common script for all factions), but there is also the script what ensures each sector with enough star shining should has a power plant and put a plot right away.
The main issue, is the jobs are being done in the wrong order. Dismantling an old "defunct" facility is easy. Assembling a new exciting facility is hard. There's no reason to dismantle any previous facility before the new one is complete.
This has been suggested many times. And yes this would probaply solve some of the problems. Don't know why they don't do it. Maybe they can't, maybe they don't want to. It could even be for lore reasons if they consider all the Xenon in the game right now being controlled by the same CPU ship.
Who knows.
But what I know is that the game develops mostly the same almost every time. Faulty logic and Atiya get wiped out by ANT and HOP Scale Plate gets wiped out by TEL, Matrix 451 and sometimes MAtrix 9 get wiped out by TEL. Tharkas IV usualy stays in Xenon hands. Emperors Pride gets wiped out by PAR.
Rhy's/ Matrix 598 usualy survive and ZYA loses Family Kritt and Zhin to the Xenon.
Tharkas Cascade main cluster stays strong as long as you do not do the work for the other factions and kill them off or lock them in with gate defences. Getsu fune gets takeb by ANT or TER fighting off the Xenon in that area.
The issue was fixed and if OP is right its back now. What means devs use old chunks of code without recent adjustments. And that is utterly sad.
Its fine only for species factions, because of huge ware assortment. Xenon produce 1 single ware. They don't need to check if it matches market purpose.
I noticed they got weaker in the beta. Couldn't even overwhelm ZYA.